What is marketing if you can’t quantify your efforts? A lot of conversations with marketing teams and executives always center around ROI. In simple terms, marketing is a science but also part art, and every single company, industry, campaign, and tactic varies widely in results. To answer the question, “What can I get for my investment?” I almost always ask, “What are your results currently?” You would be shocked at how often marketing teams don’t know this answer.
To that point, the following blog post looks through the lens of a digital marketing agency to guide you in selecting the right key performance indicators (KPIs) for your business–or at least get you started.
What is a KPI?
Most business folks have heard the term KPI, but not too many have dug deeper to determine what one truly is. Key performance indicators can range widely depending on what you are trying to indicate. The most common confusion I see with marketers is looking at metrics instead of at a KPI. Metrics will certainly inform KPIs, but not all metrics are valuable in contributing to a clear performance picture.
The best example is a company that invests in organic social media. If you don’t have a tool in place such as HubSpot, which will attribute your social media efforts to show you if a customer actually viewed your materials, you’ll likely have to rely on broad metrics that don’t paint the entire picture. While views, impressions, and clicks are healthy metrics that can help tell a story, they don’t pinpoint cause and effect. A better KPI from social media would be new contacts or customers, (which HubSpot tracks). When reporting on this KPI over time, you’ll develop a trend that tells you if your social efforts are contributing to an upward trend in the success or if you are lagging and your investment isn’t worth your effort.
How to Pick the Right KPI?
A good key performance indicator should be based on an organization's actual goals. If your company or organization doesn’t have goals, there are great organizations that can help you develop them. Our agency uses the Entrepreneurial Operating System or EOS. Part of this process includes our company and personnel being responsible for key metrics in a weekly scorecard. Based on these metrics, our leadership team can track the overall business performance. These KPIs are great at a leadership level, but since a marketing team also contributes to business performance, their KPIs must align as well.
Here are a few examples of leadership business KPIs to track from a sales and marketing perspective:
- New Deals Created
- New Deal Value
- Website Traffic
- Average Client Value
These KPIs identify our overall business trends at the highest level; however, the underlying driver of these efforts comes from our marketing team. So, determining marketing KPIs that inform these is critical.
To get started, think about which leadership KPI to start with. Let’s use “new deals created” as an example. From there, step back and think about what informs this based on your strategies or marketing efforts. Our agency strongly believes in the inbound-marketing methodology, so website traffic is one of the many important KPIs contributing to this. By tracking this, we can determine if our blog and website design strategies are effective in organic SEO and contributing to website traffic.
Every time our marketing team meets, I’m responsible for reporting on our website traffic. If traffic dips below our goal, we add that to our issues list and inspect why. Every time a metric goes south, it isn’t always cause for alarm, but being aware of this is important in case there is a problem. Month-over-month, our marketing team can see an overall trend to success, seasonality, or other interpretations of the data to inform our business decisions. Try your best to view these as a trend, not in short sample sizes. My suggestion is to review these in larger segments such as sets of weeks or on a quarterly basis.
So how does website traffic inform new deals created? Simple: math, which isn’t my strong suit. Using last year's numbers and a great reporting and attribution tool like HubSpot, we can determine that we need X amount of website visits to generate X amount of new deals. While this isn’t a 100% silver bullet to marketing success, it does give our team a goal to strive for. At the beginning of the year, if we tie our company's growth goals financially to this math, our marketing team can determine if we need to produce more content, optimize content, or consider another strategy aimed at accomplishing our growth goal.
If you are wondering what other marketing KPIs can be important to an organization, here are a few we like to look at regularly for ourselves and our clients to determine effectiveness:
- Website Traffic
- Bounce Rate
- Total Blog Posts
- New Web Pages Launched
- Social Posts
- Social Interactions
- Email (Sessions Created)
- Premium Content/Case Studies Published
- New Contacts
- New Deals
- Deal Value
- Revenue from Organic Traffic
- Most popular pages
- Most popular blogs
- PPC Advertising Spend
- Cost Per Lead
- Conversions or E-commerce Purchases
- Completed Tasks
- Returning Users
- Marketing Qualified Leads and Sales Qualified Leads
- Closed Lost Deals
- Total Pipeline Value
- Engagement Time
- Views Per User
- Domain Authority
KPIs in Action
Many more KPIs can be useful to determine your success and the overall efforts trending toward your goals. That last piece of the puzzle is ensuring that you have assigned not only an owner–but the right owner–for each KPI, and designated a place for them to collect this data. It can be as simple as a Google Sheet document or as elaborate as a fancy dashboard or specially-built software. Either way, in order to get the most value from your data and your team, you have to pick the correct KPIs, assign those KPIs to the right person, and have a place to capture the trending or lagging data. Once you’ve developed those key pillars, your organization will be able to effectively track, manage, and inform future business decisions based on your digital marketing data.
If you are working with an agency, identifying and agreeing upon the right KPIs is very important. This agreement between parties will help you to align and adjust your marketing strategies as they are implemented in real-time.
Our agency reviews these bi-weekly, quarterly, and yearly with our clients to inform us of ways to optimize for growth. I hope this blog helps you feel more confident in selecting the right key performance indicators for your organization! If you need any help, please don’t be shy, we’d be happy to make suggestions and give you some helpful tips!